Chapter 16: Real Estate Financing Practice

Question 1

Which pair of terms is considered synonymous

Answer 1

Interim financing and construction loan

Question 2

How is Fannie Mae involved with FHA loans?

Answer 2

Fannie Mae buys FHA loans

Question 3

The type of real estate loan that allows the lender to increase the outstanding balance of the loan up to the original some in the note while advancing additional funds is the?

Answer 3

Open end mortgage

Question 4

Loans for which use are not affected by the truth in lending the lender regulation Z?

Answer 4

Business use

Question 5

An FHA insured mortgage loan would most likely be obtained from what lending institution?

Answer 5

Any qualified lending institution

Question 6

Fannie Mae, Ginnie Mae and Freddie Mac have in common the purpose of?

Answer 6

Purchasing existing mortgage loans

Question 7

Does a buyer need to be a veteran to assume a VA loan?

Answer 7

No

Question 8

A mortgage broker generally offers what service?

Answer 8

Bringing the borrower and the lender together

Question 9

The maximum amount for payments in an adjustable rate mortgage is set by the?

Answer 9

Cap

Question 10

A borrower obtained a $7000 second mortgage loan for five years at 6% interest per annum. Monthly payments for $50. The final payment included the remaining outstanding principal balance. What type of loan is this?

Answer 10

Partially amortized loan

Question 11

A principal distinction between the primary mortgage market in the secondary mortgage market is in the?

Answer 11

Origination versus the purchase of mortgage loans

Question 12

A real estate loan payable in periodic installment that are sufficient to pay the principal in full during the term of the loan is called?

Answer 12

Amortized loan

Question 13

An extension of credit from seller to buyer to allow the buyer to complete the transaction is?

Answer 13

Purchase money mortgage

Question 14

When compared with a 30 year payment., Taking a loan with a twenty-year payment. Would result in what?

Answer 14

Faster amortization

Higher monthly payments

Quicker equity buildup

Question 15

Where would a borrower most likely obtain a residential real estate mortgage loan?

Answer 15

Commercial lender

Question 16

Regulation Z applies to?

Answer 16

Personal credit transactions

Question 17

In a graduated payment loan

Answer 17

Mortgage payments increase

Question 18

The type of mortgage loan that uses both real and personal property as security is?

Answer 18

Package mortgage

Question 19

Which entity normally purchases mortgages in the secondary mortgage market?

Answer 19

Ginnie Mae

Question 20

A mortgage loan requires monthly payments of $175.75 for 20 years and a final payment of $5095. This type of mortgage loan is?

Answer 20

A balloon mortgage

Question 21

In the sale and lease agreement the?

Answer 21

Buyer becomes the lessor

Question 22

A 70-year-old homeowner has on her house for over 50 years. It has fallen into disrepair book, because she lives on a fixed income, she does not have the money to make the needed repairs. She is a considerable amount of equity in the house. What type of loan would probably best suit her needs?

Answer 22

Reverse mortgage

Question 23

Type of loan that will most likely have the lowest loan to value ratio is?

Answer 23

Conventional loan without PMI

Question 24

A lender may protect its interest in a mortgage loan by obtaining additional security from?

Answer 24

Private mortgage insurance

Question 25

A developer had a mortgage loan on his entire housing development. When he sold a lot to a buyer, he was able to deliver title to that lot free of the mortgage lien by obtaining a partial release. What type of loan did the developer have?

Answer 25

Blanket mortgage

Question 26

What is not associated with a VA loan

Answer 26

A 1% prepayment penalty

Question 27

A borrower and seller have agreed to split the discount points. The sale price of the property was $125,000 and the bar were secured a 75% loan. If the lender charge for points and a 1% origination fee, how much did the borrower and the seller each pay?

Answer 27

$1875

Question 28

What loan would be covered by the real estate settlement procedures act?

Answer 28

Loan for a 1 to 4 family residential property

Question 29

A borrower has secured a FHA insured phone. This means that the FHA will insure who against a possible loss

Answer 29

Lender

Question 30

The grantor becomes the leasee and the grantee becomes the lessor under which financing arrangement?

Answer 30

Sale and leaseback